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Unisys Corporation Announces Exercise of Convertible Notes Over-Allotment Option
Posted: Wed Apr 13, 2016 04:14:29 PM


BLUE BELL, Pa., April 13, 2016 Unisys Corporation (NYSE: UIS) ("Unisys") announced today that, in connection with its previously announced offering of 5.50% Convertible Senior Notes due 2021 (the "notes"), the initial purchasers have exercised in part their previously announced over-allotment option to purchase an additional $23.5 million aggregate principal amount of the notes (the "additional notes"). The additional notes were sold on the same terms and conditions as the notes sold previously. Following the issuance of the additional notes, Unisys has issued a total of $213.5 million aggregate principal amount of the notes.

The aggregate proceeds from the offering, net of the initial purchasers' discount and the cost of the capped call transactions discussed below, are approximately $180 million (including the previously announced net proceeds of approximately $160 million). Unisys intends to use these net proceeds for general corporate purposes, which may include funding cost reduction and savings initiatives, obligations under its defined benefit pension plans, investments in next-generation services and technologies and repaying existing debt. Among these possible actions, Unisys may use all or a portion of the net proceeds from the offering to address the maturity of its $210 million 6.25% senior notes due in 2017.

The notes are Unisys' senior unsecured obligations. The notes are not redeemable prior to maturity and are convertible into shares of the company's common stock at a conversion rate of 102.4249 shares of the company's common stock per $1,000 principal amount of the notes (a total amount of 21,867,716 shares) which is equivalent to an initial conversion price of $9.76 per share of the company's common stock. Upon any conversion, Unisys will settle its conversion obligation in cash, shares of its common stock, or a combination of cash and shares of its common stock, at its election.

As with the notes previously issued, Unisys entered into privately negotiated capped call transactions with affiliates of the initial purchasers with respect to the additional notes. The capped call transactions cover, subject to customary anti-dilution adjustments, the number of shares of Unisys' common stock that will initially underlie the notes. The capped call transactions are expected to reduce potential dilution to the company's common stock and/or offset potential cash payments the company is required to make in excess of the principal amount upon any conversion of the notes.

These capped call transactions effectively raise the conversion premium on the notes from approximately 22.50% to approximately 60%, which raises the initial conversion price of approximately $9.76 per share of common stock to approximately $12.75 per share of common stock. The total cost of the capped call transactions associated with the notes was approximately $27 million (including approximately $3 million associated with the additional notes).

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